small loan for debts please advise

hellyxcx

Hi everyone,

Can someone please advise me, I have an overdraft and two credit cards I wish to pay off and repay one monthly payment i.e a loan. My debts in total add up to £3,350 - not a lot I know!!

I have an overdraft with Halifax who have decided to charge £2 per day from October , my credit card is also with halifax and my 2nd card is with capital one.

I'm considering a loan with santander, of around £3,500 over 36 months and to pay off all 3 debts in one go and repay santander via monthly payments of £150 ish each month which I can do.

Can anyone please advise if I should do this or any other suggestions - Balance transfer cards are a no go - my credit rating is medium, and as I want £3,500 there is not many available to me.

ANY help will be greatly appriciated!!!

Thanks

Oakdene

Didnt want to read & run but you will find that most people here will say that a loan to consolidate debt is rarely a good idea unless you have addressed the reason you got into debt.

You will be better off posting a Statement of Affairs on the Debt Free Wannabe board where people can help you to see where you are spending money you could be saving...

AndyPix

hellyxcx wrote: »

£150 ish each month which I can do.

Cant you just fire £50 a month at each of them ?
Or snowball them ?
:huh:

forgotmyname

£150 a month over 36 months is over £5000. So you maybe adding an extra £1500 to your debt total.

And then what happens when you get a month where you need to use your credit card? In 18 months you maybe back saying i have a £150 a month loan and another £3k on your credit card and overdraft and looking to consolidate it.

But now you need a loan of around £7000 instead and paying back over £10,000??

hellyxcx

I pay different amounts to each credit card by minimum payments now, but interest eats away at it so paying buttons. these amount to around £100 a month.

I am currently living out my overdraft and paying fee's each month. Halifax are increasing these fee's and its going to cripple me so I was hoping I could pay all 3 off and have one monthly repayment of the loan...

I'm so confused worried and stressed about it all right now....

Arleen

hellyxcx wrote: »

I pay different amounts to each credit card by minimum payments now, but interest eats away at it so paying buttons. these amount to around £100 a month.

I am currently living out my overdraft and paying fee's each month. Halifax are increasing these fee's and its going to cripple me so I was hoping I could pay all 3 off and have one monthly repayment of the loan...

I'm so confused worried and stressed about it all right now....

And consolidation won't fix that as it seems that you are living beyond your means. It will only give you some breathing room before you are in financial trouble again, this is how it almost always goes.

A much better course of action is to head off to debt free wannabe board: http://forums.moneysavingexpert.com/forumdisplay.php?f=76 and post a soa (you can find it here: http://www.stoozing.com/calculator/soa.php) then people there will help you address your financial position and find the best way to tackle the debts.

EssexHebridean

Thanks Arleen - the OP is now posting over on DFW.

forgotmyname

If your living in your overdraft then lenders will be wary about offering you a loan. The interest rate wont be the best.

Odd how you think £3500 worth of debt is not a lot, but you cannot afford to pay it back.

To some that amount of debt would be huge, some struggle to pay pay a fraction of that amount. Everyones situation is different.

If you have no money then even small figures are a challenge.

But your £3500 could very easily triple in the next couple of years if you dont cut back now.

Been there and got the T-Shirt. Never again.

Sarastro

A loan is rarely financially better over the long-term and will only do the job if you start living within your means. That means, if you go down the loan route, cancelling your overdraft facility and cutting up your credit cards and living within your budget for the month. The discipline of this may be what's needed; as you head towards zero at the end of the month with no overdraft or cards, you soon start to learn to budget! Overdrafts encourage really bad habits.

If you don't go down that route, shift as much as you can into the lowest interest rate possible. Then focus on the one that has the highest interest rate, make the minimum repayments on the others until the worst one has gone, then move onto the next one. This will at least mean you're targeting what repayments you are making.